Bombardier

This article is about the manufacturing company. For information on the military rank Bombardier, see Bombardier (rank). For information about the British bitter beer, see Bombardier (beer).

Bombardier Inc. (pronounced ), a Canadian company, was founded by Joseph-Armand Bombardier as L'Auto-Neige Bombardier Limitée in 1942, at Valcourt in the Eastern Townships, Quebec.

Contents

About

A world-leading manufacturer of innovative transportation solutions, from regional aircraft and business jets to rail transportation equipment, Bombardier Inc. is a global corporation headquartered in Montreal, Canada. Its revenues for the fiscal year ended January 31, 2004, were US$15.5 billion and its shares are traded on the TSX (BBD).

Corporate Office

800 boulevard René-Lévesque ouest

Montreal, Quebec

Canada

Fields of Activity

Rail transportation equipment
Regional and business aircraft
Financial services

Number of employees (as at January 31, 2004)

Transportation:	35,600
Aerospace:	27,000
Bombardier Capital:	700
Other:	1,300
TOTAL:	64,600

History

Joseph-Armand Bombardier was a shy, determined mechanic who dreamed of building a vehicle that could "float on snow". In 1937 the first snowmobile rolled out of his small repair shop in Valcourt, Quebec. Over the years, Bombardier continued to perfect his dream and found that winter-bound Canadians were eager to come along for the ride. Bombardier changed the way we travel over snow and he established a Canadian manufacturing giant along the way.

Born in 1907, Joseph-Armand Bombardier showed a genius for tinkering early in life. He was only 10 years old when he took a cigar box and a broken alarm clock and made a working model of a tractor. As he grew older, Armand dreamt of building a vehicle that could glide over snow—a fitting goal for a boy growing up in rural Valcourt. At 15, Armand designed and built his first snow vehicle which was basically a large sleigh powered by a Ford Model T engine with a wooden airplane propeller at the back. He and his brother drove the noisy contraption through Valcourt before their father ordered them to stop. Undeterred, Armand kept working on his idea while he earned a living as an auto mechanic. His big breakthrough came in the mid-1930s when he developed a drive system that would revolutionize travel in snow and swamp. In 1937 Armand sold 12 snowmobiles—named the B7—and opened the company l'Auto-Neige Bombardier Limitée five years later.

J. Armand Bombardier never intended his snowmobile invention to be fun. The first snowmobiles were large, multi-passenger vehicles designed to help people get around during the long winter months. Snowmobiles are used in rural Quebec to take children to school, to carry freight, to deliver mail, and as ambulances. His invention served a very real necessity and soon business was booming. In 1941 Armand opened a large new factory in Valcourt. Then a major setback hit the growing business: the Second World War was well underway and the Canadian government issued wartime rationing regulations. Suddenly, Bombardier customers had to prove that snowmobiles were essential to their livelihood in order to buy one. To keep his business going, Armand switched gears and developed vehicles for the military. After the war, Armand experienced another setback in his snowmobile business. In 1948 the Quebec government passed a law requiring all highways and local roads to be cleared of snow; Bombardier's sales fell by nearly half in one year. Armand decided to diversify his business and make all-terrain vehicles for the mining, oil, and forestry industries.

Bombardier was an inventor who never rested. By the late 1940s, the quiet French Canadian had survived several setbacks and had a modestly successful small business centred in Quebec. But Armand was not satisfied with the status quo and dreamt of developing a fast, lightweight snowmobile (the Ski-Doo) that could carry one or two people. He worked tirelessly on his idea but always found the engine too heavy for the vehicle. In the early 1950s, Armand set aside his dream to focus on developing his company's other tracked vehicles. But by the end of the decade, smaller, more efficient engines had been developed and were starting to come on the market. Armand resumed his efforts to build a "miniature" snowmobile. He worked alongside his eldest son Germain, who shared his father's mechanical talents. Armand and Germain developed several prototypes of the lightweight snowmobile and finally the first Ski-Doo went on sale in 1959.

The Ski-Doo became an instant hit but not for the reasons imagined by J. Armand Bombardier. The Ski-Doo was originally called the Ski-Dog because Bombardier meant it to be a practical vehicle to replace the dogsled for hunters and trappers. But the public soon discovered the speedy vehicles that can zoom over snow were a lot of fun. Suddenly a new winter sport was born, centred in Quebec. In the first year, Bombardier sold 225 Ski-Doos; four years later, 8,210 are sold. But Armand was reluctant to focus too much on the Ski-Doo and move resources away from his all-terrain vehicles. He vividly remembered his earlier business setbacks that forced him to diversify. Armand slowed down promotion of Ski-Doo to prevent it from dominating the other products.

On February 18, 1964, J. Armand Bombardier died of cancer at age 56. He left behind a thriving business but also one that had been focussed on one person. Armand dominated his company, overseeing all areas of operation. He controlled the small research department, making all the drawings himself. Now the younger generation took over and was led by Armand's sons and sons-in-law. The young team reorganized and decentralized the company, adopting modern business tactics. The company adopted the latest technological innovation—the computer—to handle inventory, accounts, and billing. Distribution networks were improved and increased, and an incentive program was developed for sales staff.

Joseph had the ability to overcome great odds in his life to develop a company that laid a solid foundation for the creation of a transportation giant. He had a unique ability for an inventor which was to parlay his inventions into a successful business. By the time of his death sales of the company had reached C$20 million, which is the equivalent of C$160 million in 2004 dollars. During his lifetime the province of Quebec had been economically dominated by the top anglophone businessmen and socially by the Catholic Church, with very limited opportunities for francophone businesspeople. He was able to overcome these obstacles through sheer determination and inventiveness.

Global expansion

Under the management of Laurent Beaudoin, Bombardier's son-in-law, the company took over the Canadian government-owned Canadair aircraft manufacturing company in Montreal that had recorded the largest corporate loss in Canadian business history. Bombardier became a leading manufacturer of business jets, regional aircraft, and trains. Besides the famous Challenger and Global business jets, in 1990 Bombardier acquired the Learjet Company of Wichita, Kansas, builder of the world-famous Learjet business aircraft. As of 2001, it had 80,000 employees, and C$16 billion in annual gross revenue. The aerospace arm, Bombardier Aerospace, accounts for over half of the company's revenue and is reportedly the third-largest aircraft manufacturer in the world behind the giants Boeing and Airbus. In 2003 it spun off as a separate company the Bombardier Recreational Products division, whose snowcats and snowmobiles had been the origin of the company.

In 1970, Bombardier acquired the Viennese company Lohner-Rotax, a manufacturer of snowmobile engines and tramways, and thus became involved in rail business. This section started to grow important in the mid-1990s in the renaissance of tramways / light rail transit. Bombardier acquired the assets and designs of American Locomotive Company/Montreal Locomotive Works who continued in the locomotive business until 1985. They built the Class 170 Turbostar and Class 357/375/376/377 Electrostar trains which are widely used throughout Britain. They also built the Croydon Tramlink and Nottingham Express Transit trams and parts of Alstom's Eurostar trains. They are one of the companies which took over British Rail's R&D facilities after privatisation (the remainder largely being absorbed into AEA Technology and Alstom). They were part of a major consortium in the construction of the Eurotunnel railway cars, and also built new subway trains for the Toronto Transit Commission, the Commission de transport de la Communauté urbaine de Montréal, and the New York City Transit Authority, and developed the Las Vegas Monorail system.

Bombardier is a UK Notified Body, under The Railways (Interoperability) (Notified Bodies) Regulations 2000, in one TSI area: rolling stock.

Bombardier Transportation also leads the development and production of the Acela Express train in a 75%–25% arrangement with Alstom. The train runs between Boston, New York City and Washington, DC. Bombardier provided carbody design and tilting mechanisms from its successful LRC ("Light Rapid Comfortable") line of passenger trainsets, and integrated a unique variant of Alstom's TGV propulsion system. This is the first high-speed rail line in North America, running at a top speed of 240 km/h (150 mi/h). To meet U.S. government "Buy American" regulations, final assembly of these trains was performed at Bombardier's U.S. rail car assembly facility in Barre, Vermont. Bombardier also provided seller-arranged financing to allow Amtrak to lease the trainsets rather than purchasing them outright as the railroad had previously done.

They were, until recently, a major Canadian defence contractor. With the latest restructuring the company sold off nearly all of its military related work in Canada. However it continues to participate in military contracts in other countries, such as in the United Kingdom, with the ASTOR (Airborne Stand-Off Radar) conversion of the long range Challenger Global Express jet. The actual conversion is carried out by Raytheon.

In 2001 Bombardier Transportation acquired Adtranz, making it the second largest manufacturer of railway rolling stock in the world. Depending on how one defines industrial activities, it is sometimes considered the largest in the world in this category.

Criticisms

Bombardier has been criticized in Canada and abroad for its massive government subsidies. This corporate welfare has been viewed as a violation of free trade agreements, especially by Brazil which has complained internationally about them, while giving direct and indirect subsidies to its own major aircraft manufacturer and competitor of Bombardier, Embraer.

Many Canadians also feel tax money should not go to wealthy companies. The government defends these policies arguing that they create many jobs and that Bombardier would never have become an integral part of the Canadian economy without subsidies. Bombardier aggressively seeks out state support in every country in which it has plants, and often obtains it, in the form of direct subsidies, tax cuts, free land, previous debt erasure or other forms. To give a few examples: It obtained tremendous sums in indirect ways from the United Kingdom when it acquired Short Brothers of Belfast, and modest but important incentives from the state of Vermont when it opened an assembly plant there. The government of Canada provided a huge interest rate subsidy for the financing that made possible Bombardier's sale of subway cars to the New York City Transit Authority.

Bombardier's reputation may have been tarnished in the western United States by their association with the financially ambitious Las Vegas Monorail system. The system opened late, and after only a month of operation it was shut down for another four months. Reportedly, $85,000 per day was lost while the system was closed. The system finally reopened on December 24, 2004. It had been hoped that the system would be a first by being the only public transit system in the United Stated to operate without a deficit. Due to problems with the system, the US Government has denied funding for a $400 million extension of the system.

Recently, Bombardier have faced pressure from the media and their own shareholders over their involvement in China's controversial Qingzang Railway line into Tibet, to which they are providing passenger carriages.